Are you on top of Centrelink’s family benefits changes?

Jason Bryce |
January 09, 2017

These eight changes to family payments could make you poorer in 2017.

Picture: iStock

Your family will probably need to get by with a lot less in 2017 – possibly many thousands of dollars less. Big changes to family tax benefits, schoolkids bonus, parental leave pay, childcare assistance and other payments are coming into force now.

In its drive for budget savings, Malcolm Turnbull’s government has targeted family payments and Centrelink benefits for big cuts. Many of those cuts came into force on 1 January 2017 while others come into force in the next few months. A middle income working family with kids at school will lose thousands of dollars. Let’s break it down:

1) Schoolkids Bonus is axed

Former prime minister Tony Abbott and former treasurer Joe Hockey first tried to axe the popular Schoolkids Bonus in their 2014 budget. You might remember that budget – it was the one that never fully passed the senate and eventually led to the demise of both Abbott and Hockey. They might be long gone but their proposal to axe the $4.5 billion Schoolkids Bonus (SKB) scheme lived on and the payment was phased out, eventually ending in 2016.

So that means that in 2017 families with household incomes under $100,000 will have to go without the two big SKB lump sum payments. In 2016, SKB paid the parent or carer of each primary school aged child $215 in January and another $215 in July for a total of $430. Each high school aged child received $428 in January and July for a total of $856 per year.

A family with two kids will lose up to $1,712 this year. This cut will hurt more than six million Aussies.

2) Childcare costs are going up

The cost of childcare will rise again in 2017, by about five percent, and keep rising over the next four years, according to the Commonwealth Department of Education. Centrelink’s rebate repays 50 percent of your out-of-pocket child care costs, and isn’t income tested, but has been capped at $7,500 per family per year since 2009.

Rebates aren't rising with costs. Picture: iStock.

The government wants to combine Centrelink’s child care rebate and child care benefit and scrap the rebate cap for most families but says this change must be paid for by more big cuts to family benefits for low income families, which are opposed by the Labor opposition. While the politicians argue through this impasse, you’ll need some good luck finding and paying for childcare in 2017.

3) Parental Leave Pay is now assessed as income

Families with babies born after 1 October 2016 have different rules to those with babies born before this date. Parental Leave Pay and Dad and Partner Pay will now count as income for Centrelink purposes, meaning your other payments, like the Parenting Payment will go down or disappear altogether. This will affect working families with household incomes under $150,000.

4) Family Tax Benefit supplement changes

There are two types of Family Tax Benefit – Part A and Part B. Most Aussie families are eligible for at least a small FTB Part A payment because the income test limits are fairly generous and rise with the number and ages of your children. FTB Part B is designed to help low, single income families.

What has changed now is the end-of-financial-year lump sum FTB payments that help balance your payments and ensure that you have received the right amount of money during the year. Now families with a combined household income over $80,000 per year will lose their FTB Part A supplement of up to $726 per child.

Picture: iStock

5) Fringe Benefits are now counted as income

Any fringe benefits you or your partner get from an employer, like a car, mobile phone or help with housing costs, school fees and child care expenses will now be 100 per cent assessed as income for Centrelink purposes. This applies to all employees, except people working for charities and health services.

6) Income caps are frozen for the next four years

Many working families will lose payments or see their payments reduce progressively over the next four years because most family and parental payment income limits have been frozen until 2020.

7) Single Income Family Supplement axed (for some)

The Single Income Family Supplement is a $300 yearly payment to families with one main income earner. From 1 July 2017, it will not be paid to new applicants.

8) Energy supplement has gone (for some)

The Energy supplement is a small extra payment that was introduced by the Gillard government to compensate people for rising energy costs. From March 2017, new applicants for Family Tax Benefit will no longer get the energy supplement. That means a loss of up to $7.28 per child per fortnight in FTB payments.

There are more cuts to family payments that the government has in store but these are still stuck in the parliament. As government debt continues to rise, you can expect more pressure to be applied to politicians of all parties to pass more deep cuts to family payments. Happy new year!

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